TMI Blog2011 (5) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... tinuation of the earlier set of 19 show-cause notices and that the demand of duty was within the normal period of limitation. In our view, the best evidence in support of this contention is the fact that all the show-cause notices were adjudicated upon by the Commissioner in a single proceeding culminating in the impugned order. - Decided against the assessee. Interest u/s 28AB - held that:- the assessee has to pay interest on the duty amount under sub-section (1) of Section 28AB as amended. However, no interest is leviable for any period prior to 11-05-2001 as sub-section (2) of Section 28AB forbids levy for past period. Penalty u/s 114A - held that:- the show-cause notices had not alleged collusion, wilful misstatement of facts or suppression of facts against the appellant. Hence imposition of the penalty on them is beyond the scope of the show-cause notices. - C/19/03 & C/85/03 - - - Dated:- 16-5-2011 - Mr. P.G. Chacko, Mr. S.K. Gaule, JJ. Appearance: S/Shri Prakash Shah, J.H. Motwani and Prasad Paranjpe, Advocates for appellant Shri A.K. Prasad, Authorised Representative (JCDR), for respondent Per: P.G. Chacko M/s. Dow Agrosciences I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,830 3607538 15.06.98 - do - 10,39,991 3,41,33,774.00 1,09,70,956/- 2. Based on intelligence about a racket involving forgery of export documents and marketing of the DEPBs obtained on the basis of such documents, the DRI launched investigations in December 1998. The suspects were interrogated and their premises were searched for incriminating documents. From the results of investigations, it appeared to the DRI that all the DEPBs mentioned in column (5) of the above table had been obtained by racketeers in the name of the firms mentioned in column (6) of the said table on the basis of forged Shipping Bills (SBs) and forged Bank Certificates of Export Realisation (BCERs) without actual export of goods and that De-Nocil purchased the said DEPBs from the market through P.K. Srinivas (appellant in the 2nd appeal) and utilized the same for clearing the goods without payment of duty in terms of Notification No.34/97-Cus. On examination of documents (SBs, BCERs and Applications for DEPBs) collected from the office of the Joint Director-General of Foreign Trade (Jt. DGFT), DRI's investigators found in the SBs endorsements in the name of two offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, as demanded vide 10 Less Charge Demand SCNs mentioned above; (d) the interest due in terms of Section 28AB should not be demanded; and (e) penalty should not be imposed on them under section 114A/Section 112 of the Customs Act, 1962" The SCN also required P.K. Srinivas and certain others to show cause why penalties should not be imposed on them under Section 112 of the Act. What made the DRI issue this SCN could be read in para (70) thereof thus: "This Show Cause Notice is issued to cover all the additional facts of the cases in addition to the facts covered in 19 less charge demand notices issued to M/s. De-Nocil Crop Protection Ltd., for importing consignments against DEPB's obtained by the racketeers on the basis of forged Shipping Bills and BRC's." 4. Contesting the demand of duty and other proposals raised in the above SCN, De-Nocil filed a reply through their advocate stating as follows:- (a) They are bona fide purchasers of the DEPBs and have taken all reasonable care and diligence required of a prudent person. As it is not in dispute that the DEPBs were issued by the DGFT and were verified by the Bombay Customs House, it is not open to the departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 114A of the Act; and (e) imposing penalties on other noticees (including penalty of Rs.10 lakhs on Shri P.K. Srinivas) under Section 112(a) of the Act. 6. When personal hearing in this case was concluded on 3.9.2010, the counsel for De-Nocil sought leave to file an application for amending the appellant's name in the cause-title of the memo of appeal. Leave was granted. The application which was subsequently filed by De-Nocil was heard by the bench on 8.9.2010, on which date the bench also directed both sides to file argument notes (with specific reference to case law) in the appeal on or before 27.9.2010. Though the JCDR filed his written submissions on 27.9.2010, the advocate's written submissions were filed only on 18.11.2010 with a request for condonation of delay. The delay was condoned on 18.11.2010. Final orders in the appeals were reserved. 7. The miscellaneous application of De-Nocil is for change of their name in the appeal to 'Dow Agrosciences India Private Limited' and is supported by a copy of 'Fresh Certificate of Incorporation Consequent on Change of Name', dated 17.2.2005, issued by the Assistant Registrar of Companies, Maharashtra. The applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Pvt. Ltd. who stated that they had not handled the cargo mentioned in the SBs, and (vi) orders of the Deputy DGFT, Mumbai canceling the DEPB licences ab initio. It is significant to note that the appellant has not assailed the above evidence. The appellant has virtually acquiesced in the factual position that the DEPB licences used for duty-free clearance of the goods imported by them had been obtained by the original licensees by producing forged and fake SBs and BCERs without export of any goods and that the licences were cancelled ab initio by the licensing authority later. Their only contention is that, as bona fide purchasers of the DEPBs with no notice of the tainted character of the licences, they cannot be adversely affected by the post-import cancellation of the licences. Their argument is that the DEPBs were valid when used for duty-free clearance of the goods imported by them and that the subsequent cancellation of the DEPBs by the DGFT cannot be any ground for the department to demand the duty from them. Per contra, the respondent has invoked the caveat emptor rule to argue that it was for the importer, before using the DEPBs for duty-free clearance of the imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC)] wherein it had been held that a licence obtained by fraud was only voidable and was good till it was avoided in the manner prescribed by law. The above view of the Tribunal was upheld by the Supreme Court as follows:- "In the aforementioned decision of this Court it has been clearly laid down that in a case where the licence is obtained by misrepresentation or fraud it is not rendered non est as a result of its cancellation so as to result in the goods that were imported on the basis of the said licences and being treated as goods imported without a licence in contravention of the order passed under Section 3 of the Import and Export Act that fraud or misrepresentation only renders a licence voidable and it becomes inoperative before it is cancelled. In the present case the licences were cancelled by order dated December 18, 1986 after the goods had been imported and cleared.The Tribunal was, therefore, right in holding that the import of the goods was not in contravention of the provisions of Import and Export Order, 1955 and Import and Export (Control) Act, 1947 and the goods were not liable to be confiscated on that basis under Section 111(d) of the Act." 9.4 In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion, thus the imports were made under valid licences, the goods could not be subjected to levy of customs duty in the peculiar facts and circumstances of the cases in hand." 9.5 In the case of Commissioner vs. Leader Valves Ltd. [2007 (218) ELT 349 (P H)], the respondent had imported certain goods duty-free in terms of Notification No.34/97-Cus. by utilizing a DEPB scrip which had been transferred to them by the original licensee, M/s. Parker Industries for a consideration. Later the DEPB scrip/licence came to be cancelled by the licensing authority (Joint DGFT, Ludhiana) having found that the licence had been obtained by M/s. Parker Industries fraudulently by producing a forged BCER purported to have been issued by Punjab Sind Bank. The Jt. DGFT's order was upheld, in appeal, by the Additional DGFT. The Commissioner of Customs noted these facts while adjudicating a show-cause notice issued to the respondent, and ordered recovery of duty from the respondent, held the goods liable to confiscation and imposed a penalty on M/s. Parker Industries. In an appeal filed by the assessee against the Commissioner's order, the Tribunal held in their favour in view of the Hon'ble Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s decision in Taparia Overseas case. The Hon'ble P H High Court dismissed the department's appeal filed against the Tribunal's decision, and the Hon'ble Supreme Court dismissed the Civil Appeal filed by the department against the High Court's order. 9.7 In the case of Hico Enterprises vs. Commissioner [2005 (189) ELT 135 (Tri.-LB)], the assessee had imported certain raw material under a Value-based Advance Licence procured from M/s. Amar Tara Exports who had obtained the licence from the DGFT. They cleared the raw material duty-free under Notification No.203/92-Cus. dated 19.5.1992 with obligation for export of their final product. In a show-cause notice issued later on to them, the department proposed to recover the duty forgone by alleging that condition v(a) of the above Notification (that no input stage credit shall have been obtained under Rule 56A or 57A of the Central Excise Rules, 1944 in respect of the goods that are exported towards discharge of export obligation) had been contravened. The demand of duty was contested by the assessee who asserted that they did not contravene the conditions of the Notification and were eligible for the exemption under the Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner [2008 (223) ELT 553 (Tri.-Del.)] and Paramount Steel Ltd. vs. Commissioner [2008 (223) ELT 593 (Tri.-Del.)], the adjudicating and first appellate authorities had demanded duty from the assessees in respect of the raw materials imported and cleared by them duty-free by using DEPB scrips which had been purchased from original licensees who had obtained the same fraudulently from the licensing authority. The assessees, appeals against the demand of duty were allowed by the Tribunal following the High Courts, judgments in Leader Valves case and Vallabh Design Products case. 9.10 In the case of Binani Cement Ltd. vs. Commissioner 2010 (259) ELT 247 (Tri.-Ahmd.), the assessee had used two DEPB scrips (which had been originally obtained by M/s. Sri Vishnu Merchants from the DGFT and were eventually purchased by the assessee from the market) for duty-free clearance of two consignments of steam coal in terms of Notification No.34/97-Cus. Subsequently, the DEPB scrips were cancelled ab initio and the IE Code of M/s. Sri Vishnu Merchants suspended by the licensing authority (Jt. DGFT). Later on, in adjudication of a show-cause notice issued by the department, the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny misrepresentation, it was for the licensing authorities to take steps in that behalf. In the present case, the licensing authority sought to cancel the licenses, but in appeal, the order was set aside and remanded for de novo consideration. No further order has been passed thereafter. In the circumstances, till today the licenses are valid. Even if the license was subsequently cancelled, the Supreme Court in the case of Sampat Raj Duggar v. Union of India, 1992 (58) E.L.T. 163 (S.C.), following East India Commercial Co. Ltd. v. Collector, 1983 (13) E.L.T. 1342 (S.C.) = 1963 (3) SCR 338 has held that on the date of the import the goods were covered by a valid import license. The subsequent cancellation of a licence is of no relevance nor does it retrospectively render the import illegal." 9.12 In the case of Yasha Overseas others vs. CST others [(2008) 85 SCC 681], the Hon'ble Supreme Court examined the features of the DEPB scheme and treated a DEPB scrip as 'goods', at par with REP licence, for purposes of sales tax laws. CASE LAW CITED ON BEHALF OF THE REVENUE: 9.13. In the case of ICI India Limited vs. Commissioner [2005 (184) ELT 339 (Cal.)], the appellant had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. His order was challenged before the Tribunal in an appeal filed by the assessee who relied on the apex court's judgments in the cases of East India Commercial Co. Ltd. and Sneha Sales Corporation and the High Court's decision in Taparia Overseas case. The Tribunal dismissed the assessee's appeal by holding that 'any concession availed on such DEPB scrips remains null and void and would not acquire legal validity at any time.' The assessee's appeal against the Tribunal's order was dismissed by the High Court vide Friends Trading Co. Ltd. vs. UOI [2010 (254) ELT 652 (P H)] wherein the Hon'ble High Court followed its own earlier decision in Munjal Showa Ltd. vs. Commissioner [2009 (246) ELT 18 (P H)]. A SLP (No.10287/2009) filed by the assessee against the High Court's judgment and a Review Petition (No.2334/2009) filed by them against the order in SLP were dismissed by the Hon'ble Supreme Court. 9.15 In the case of Munjal Showa Ltd. (supra), the High Court had dismissed the assessee's appeal filed against the Tribunal's order upholding the order of the Commissioner of Customs demanding duty with interest from the assessee.The Commissioner had held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso proposing to impose penalty. In adjudication of the show-cause notice, the Commissioner of Customs confirmed the demand of duty against the party and imposed equal amount of penalty on them. The Tribunal set aside the Commissioner's order on the ground that the proviso to Section 28 (1) (extended period of limitation) and Section 114 A (penalty) of the Customs Act were not applicable to the case. Civil Appeal filed by the department against the Tribunal's decision was allowed by the Supreme Court in Commissioner vs Aafloat Textiles (I) Pvt Ltd [2009 (235) ELT 587 (SC)]. The court discussed various forms and features of fraud and its effects. It also examined the applicability of the maxim 'caveat emptor'. The Hon'ble Court held that as fraud was involved, the forged/fake SILs did not have existence in the eye of law and that the involvement of fraud was sufficient to extend the period of limitation. 9.18 The learned JCDR also quoted judicial authorities in support of his submission that the terms of Notification No. 34/97-Cus should be strictly construed. Examples:- para (16) of Rajasthan Spg Wvg. Mills Ltd vs Collector [1995 (77) ELT 474 (S.C)] and para ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted the contention of the Senior Standing Counsel for Central Government that, as the certificates had been issued under a bona fide impression that JBIC was an 'international organization' and were cancelled by TCAPL as soon as they learnt of the mistake, the doctrine of promissory estoppel was not attracted. The following are excerpts from the High Court's judgment: "19. The plea of promissory estoppel pressed against Excise authorities is misconceived. There is no material brought on record to establish that any promise was made by the Central Government or the Excise authorities with respect to the exemption of goods supplied by the petitioner to A.P. TRANSCO. The letter of Excise Superintendent relied upon by the petitioner cannot be construed as such representation by the Excise authorities. We are inclined to uphold the contention of the learned Standing Counsel for Central Government that the principle of estoppel based on the letter dated 08.01.2001 - Annexure P13 is not attracted. The letter granting such permission by the Excise authorities is traceable to Rule 173(b) of the Excise Rules. Unless the petitioner satisfies the condition precedent for grant of exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner [2010 (256) ELT 161 (SC)] and argued that the dismissal of SLP even on merits could not create a binding precedent under Article 141 of the Constitution. This argument was advanced in connection with his submission that the dismissal of SLP and Review Petition in the case of Friends Trading Co (vide supra) by the Supreme Court did not have the effect of upholding the High Court's judgment in that case. The learned JCDR, on his part, claimed support from Vikram Cement vs. Commissiner [2009 (242) ELT 545 (Tri.-Del.)] wherein it was held by the Tribunal that an order of dismissal of SLP by the apex court 'on the facts of the case' was a speaking order having binding effect. He also referred to the Tribunal's larger bench decision in Vandana Global Ltd. vs. Commissioner [2010 (253) ELT 440 (Tri.-LB)] wherein Vikram Cement was upheld. REJOINDER 9.23 In his rejoinder, the learned counsel relied in Commissioner vs Toyo Engineering India Ltd [2006 (201) ELT 513 (SC)] in support of his argument that the Revenue could not be allowed to raise before the Appellate Tribunal any new plea which had not been raised in the show-cause notices. It was pointed out that the learned JCD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferable. The transfer of DEPB shall, however, be for import at the port specified in the DEPB which shall be the port from where exports have been made". In the present case, "DEPBs on post-export basis" were obtained from the licensing authority under the FT(D R) Act by racketeers (mostly in the name of non-existent and fictitious firms) by producing forged and fake Shipping Bills (SBs) without exporting any goods. "Transferability" was got endorsed on the DEPBs by the licensing authority, on the basis of forged and fake Bank Certificates of Export Realisation (BCERs). These facts are not in dispute. In the absence of exports and realization of export proceeds, no credit of duty accrued "as a specified percentage of f.o.b. value of exports" to the allottees of the DEPBs and nothing rendered the DEPBs "transferable" in the eye of law. The DEPBs did not have any intrinsic value in the form of transferable credit of duty. The DEPBs and the transferability endorsed thereon ever stood vitiated by fraud. If the principle that no one can claim any benefit under a forged document is applicable to the original allottees, it should be held that they did not earn any credit of dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt's ruling. A closer look at para 226 of the Policy would reveal as to why the transfer of REP licence was said to be "governed by the ordinary law" --- the licence was freely transferable as in an ordinary mercantile transaction without any endorsement or permission from the licensing authority. As per the Hon'ble High Court's ruling as we comprehend it, the concept of fraud vitiating everything is not applicable to such a transaction. But the concept is applicable where a transaction of transfer of licence is governed by provisions of any statute. This view, which is clearly discernible from the Hon'ble High Court's ruling, is applicable to the present case wherein admittedly the DEPBs were not transferable without the licensing authority's endorsement of transferability under the relevant provisions of the Exim Policy (1997-2002) issued under the FT(D R) Act, 1992. Where such endorsement was statutorily required to make the DEPB scrips/licences transferable, it could only be said that the transaction of transfer of the scrips was governed by provisions of the statute viz. the FT(D R) Act and the Exim Policy issued thereunder. The concept of fraud vitiating everything must, then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of a licence which is otherwise valid and operative and that too retrospectively. In our opinion, the power to cancel a licence includes cancellation of both, whether unutilized or utilized." [underlining supplied] The Assistant DGFT's order cancelling a DEPB ab initio under Section 9(4) ibid was upheld by the Hon'ble High Court. Of late, we have also come across a recent judgment of the Hon'ble Bombay High Court [Bhilwara Spinners Ltd. Vs. Union of India 2011 (267) ELT 49(Bom.)] holding that the DGFT has power to amend a licence retrospectively. One case cited by the learned counsel viz. Vikrant Overseas Vs. Union of India 2000 (123) ELT 486 (P H), wherein contra view had been taken, has been distinguished in Bhilwara Spinners case. Therefore, in our view, the power of the licensing authority under Section 9(4) of the FT(D R) Act to cancel a DEPB whether utilized or unutilized (i.e., ab initio) is indisputable. If that be so, the orders of the licensing authority (Deputy DGFT, Mumbai) cancelling ab initio the DEPBs which were utilized by De-Nocil for duty-free clearance of the goods imported by them had full effect in law with the result that customs duty equal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EPB-holder so as to be used for purposes of Notification No. 34/97-Cus. 9.29. The contention of the appellant is that, as they had purchased the DEPBs bona fide for valuable consideration without notice of the transferors' fraud, they cannot be denied DEPB credit. Per contra, the Revenue has invoked the caveat emptor principle by pointing out that it was for the appellant to make sure that the original allottees (transferors) had actually earned transferable credits of duty by exporting goods and realizing proceeds, as the Exemption Notification itself clearly indicated that no credit could be earned without exports. We are inclined to accept this plea and hold that the above principle was rightly invoked in this case. In this manner only, fraud on the Revenue can be made actionable. Any different view will only perpetuate the menace of fraud on the Revenue and defeat the public interest. If the appellant's argument is accepted, the results will be catastrophic for the Revenue. In our view, it is to secure the revenue that the licensing authority under the FT(D R) Act has been empowered to cancel DEPBs (whether utilized or unutilized) retrospectively. The rule of law demands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transferor of the license in question, the judgment of the CESTAT does not suffer from any infirmity to warrant interference. The appeal is dismissed." [underlining supplied] Ajay Kumar Co:- "It is seen that in view of the fact in the show cause notices, there was no reference to the alleged infraction of M/s. Parker Industries, the transferor of the license in question. The judgments of the CESTAT and the High Court do not suffer from any infirmity to warrant interference. It is to be noted that in Commissioner of Customs (Import) Bombay v. M/s. HICO Enterprises [2008 (11) SCC 720] similar view was taken. The appeal is dismissed." [underlining supplied] In De-Nocil's case, the show-cause dated 5.10.2001 clearly brought out the fraud committed by the transferors of DEPBs. It was clearly alleged in the show-cause notice that the Shipping Bills and Bank Certificates of Export Realisation on the basis of which the DEPBs had been issued by Dy. DGFT, Mumbai were all forged. It was also alleged that most of the DEPBs had been obtained by the racketeers in the name of non-existent/fictitious firms. Even the transfer letters were also alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y condition No. (ii) and cannot use the DEPB for duty-free clearance of his imports. In our view, the proviso to condition No. (iii) ibid should be construed harmoniously with this position. According to the said proviso, exemption from duty shall not be admissible if there is "insufficient credit" in the DEPB for debiting the duty normally leviable on the goods. This would mean that, where an importer wants to clear his imports without payment of duty by using a DEPB issued on post-export basis, he should ensure firstly that there is "credit" earned from exports and duly entered in the DEPB and secondly that the credit is "sufficient" for debiting the duty which is leviable on the goods but for the exemption. To our mind, in the present context, the word "sufficient" or "insufficient" will make sense only if it is used to qualify "credit earned from exports". In the instant case, as we have already found, the original allottees of the DEPBs had not earned any "credit" of duty in the absence of exports and, therefore, the appellant who purchased those DEPBs did not acquire any "credit", let alone sufficient, for duty-free clearance of their imports in terms of Notification 34/97-C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ennai [2006(199) ELT 405 (Mad.)] wherein the Hon'ble High Court framed the following question of law:- "2......... ........ (1) Whether the Tribunal was right in holding that the order of assessment on which no Appeal was preferred, can be reopened by issue of a fresh Show Cause Notice under Section 28(1) of the Customs Act, in the light of the Apex Court's decision reported in 2004 (172) E.L.T. 145 (S.C.) in the case of Priya Blue Industries Ltd. v. CC ?" The Hon'ble High Court answered the above question in the affirmative in favour of the Revenue in para 6 of its judgment, which reads as under:- "6.?With regard to question No. l, the law is well settled that a show cause notice under the provisions of Section 28 of the Act for payment of customs duties not levied or short-levied or erroneously refunded can be issued only subsequent to the clearance of the goods under Section 47 of the Act vide Union of India v. Jain Shudh Vanaspati Ltd. [1996 (86) E.L.T. 460 (S.C.)]. Therefore, as rightly held by the Tribunal, if the contention of the appellant's counsel that when the goods were already cleared, no demand notice can be issued under Section 28 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2002 (143) ELT 3 (SC)] wherein the challenge set up by the assessee against show-cause notice dated 20.2.1986 which was issued by the Collector of Central Excise in continuation of two earlier show-cause notices (dated 6.12.1982 and 2.4.1983) issued by the Superintendent of Central Excise demanding duty for the period from 2.12.1981 to 26.2.1982 was held by the apex court to be untenable. 11.3. It is not in dispute that 19 show-cause notices were issued on 16-02-1999 to the appellant under Section 28(1) of the Customs Act within the normal period of limitation. The main allegation raised in those show-cause notices was that the DEPBs used by the appellant for duty-free clearance of the subject consignments had been wrongly obtained on the basis of false declarations and fraudulent documents and that the credit entries shown therein had been allowed without export of goods. Those show-cause notices had sought to recover the duty from the appellant by denying them the benefit of Notification No.34/1997-Cus. Subsequently, after gathering further evidence by way of recording statements of the persons involved in the DEPB racket, obtaining inputs from the DGFT's office etc, the DRI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licensing authority. The case of the department remained consistently that De-Nocil as transferee of the DEPBs was not entitled to the benefit of Notification No.34/97-Cus. on the strength of the DEPBs which had been obtained by the transferors fraudulently on the basis of forged documents and hence De-Nocil was liable to pay the duty on the goods imported by them. In this scenario, we have to accept the contention of the ld. JCDR that the show-cause notice dt. 05-10-2001 was issued in continuation of the earlier set of 19 show-cause notices and that the demand of duty was within the normal period of limitation. In our view, the best evidence in support of this contention is the fact that all the show-cause notices were adjudicated upon by the Commissioner in a single proceeding culminating in the impugned order. The decision cited by the ld. Counsel is, therefore, not applicable. But the decision of the apex court in the case of BPL India Ltd. cited by the ld. JCDR appears to be supportive of the Revenue. In that case, the Collector of Central Excise had issued a show-cause notice dt. 20-02-1986 in continuation of 2 earlier show-cause notices dt. 06-12-1982 and 02-04-1983 issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to pay interest at such rate not below ten per cent and not exceeding thirty per cent per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette, from the first day of the month succeeding the month in which the duty ought to have been paid under this Act, or from the date of such erroneous refund, as the case may be, but for the provisions contained in sub-section (2), or sub-section (2B), of section 28, till the date of payment of such duty: Provided that ....... ....... (2)?The provisions of sub-section (1) shall not apply to cases where the duty or interest had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President." [Underlining supplied] 12.2. We have already held to the effect that, as the appellant did not satisfy condition No.(ii) of Notification No.34/97-Cus., they ought to have paid duty on the goods imported by them. The duty 'not levied' on the goods was demanded under sub-section (1) of Section 28 of the Customs Act by the department by issuing the subject show-cause notices and the same has been determined by the Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 111 of the Customs Act, no penalty was imposable on him under Section 112 (a) of the Act. Learned JCDR, claiming support from a statement of P. K. Srinivas, dated 13.1.1999, recorded under Section 108 of the Customs Act, argued in justification of the penalty imposed on him. 14.2. After considering the submissions, we have found no justification for the penalty imposed on the appellant. The show-cause notice dated 5.10.2001 had inter alia proposed a penalty on De-Nocil under Section 114A/ Section 112 of the Customs Act. The adjudicating authority imposed penalty on them under Section 114A of the Act, which we have set aside. The fifth proviso to Section 114A reads thus: 'provided also that where any penalty has been levied under this section, no penalty shall be levied under Section 112 or Section 114'. Now that the penalty under Section 114A stands vacated, the question might arise as to whether Section 112 could be invoked against De-Nocil. In this connection, we must have a closer look at the relevant proposal in the show-cause notice dated 5.10.2001. The proposal was to impose a 'suitable penalty on De-Nocil under Section 112 of the Customs Act in lieu of conf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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